Roll No: 16
¥ Benchmarking is the process of identifying
"best practice" in relation to both products
and the processes by which those products
are created and delivered.
¥ Benchmarking is the process of comparing the
business processes and performance metrics
including cost, cycle time, productivity, or
quality to another that is widely considered
to be an industry standard benchmark or best
benchmarking and competitive
• competitive analysis involves comparing
your product with your competitors.
• On the other hand, benchmarking goes
into more detailed comparison that
includes how the product is engineered,
manufactured, distributed and supported.
The benefits of conducting a
benchmarking exercise can include:
• Creating a better understanding of the
• Increasing awareness of changing customer
• Encouraging innovation
• Developing realistic, stretching goals
• Establishing realistic action plans
Types of benchmarking
¥ Compares and contrasts a number of
facilities that operate the same supply chain
processes within the organization.
¤A company operates five distribution
centers in the US and Canada.
¤Examine a number of operations that
take place at each of the distribution
¤Compare performance and make
¥ Organizations use performance measures
to compare themselves against similar
¤FMCG’s comparing with each other for
Market share, Retention rates, profits,
¥ Takes a company outside of its own
industry and exposes them to different
methods and procedures.
¤ A manufacturer and distributor of electrical
components have internally benchmarked their
warehouses for a number of years and have
exhausted ideas on improving efficiencies.
¤ They approached a very successful retail
company to visit their central warehouse and
benchmark the processes that occur there to
compare to their own warehouse processes.
¥ FINANCIAL: Financial analysis
comparison with other targets to
assess overall competitiveness
¥ PRODUCT: Process of
designing new products or
upgrades to current ones,
including reverse engineering of
¥ STRATEGIC: Process of
observing common or uncommon
groups’ competitive advantages
¥ PROCESS: Identifies and
observes specific business
processes with a goal of
identifying best practices
¥ FUNCTIONAL:Focuses on a
single function in order to
improve the operation of that
¥ PERFORMANCE: Helps
companies assess their
competitive position by
¥ METRICS: Used to
outsiders to evaluate the
performance of operators in
• Select the key areas to be benchmarked for
• Then form a team.
• Understand the vital points and then carry
out the documentation process.
• Consequently, establish performance
• First of all list the criteria for selecting a
• Then conduct a general or a secondary
• Decide the level to benchmark.
• Then identify potential partners and
During, this stage necessary information
is collected using a questionnaire sent to
partner, telephone contact and direct
observation or site visit.
• The data and information obtained in the
previous stage is sorted.
• Quality control information and data are
• Normalize data if necessary.
• Identify gaps in performance level and the
causes for gaps.
• The last stage involves identification of
opportunities for improvement.
• Then a target is set for improvement .
• An implementation plan is developed and
the progress monitored.
• The final report is documented.
¥ Best practices from any industry can be
¥ Stimulates and motivates professionals to
perform & implement benchmark findings.
¥ Helps to identify technological
¥ It opens organizations to new methods,
ideas and tools to improve their
¥ Maintaining benchmarking efforts is costly.
¥ Reluctance to share information.
¥ Today's realistic applications may not be
¥ What is best for someone else may not suit
¥ Poorly defined benchmarks may lead to
wasted effort and meaningless results.